How does your nonprofit account for unemployment insurance?

July 31, 2014

How does your nonprofit account for unemployment insurance?

Risk management is certainly a popular topic for nonprofits that want to remain agile and effective. However, there’s one area that tends to be overlooked by such groups: state unemployment taxes (SUTA). The two traditional options for covering the SUTA obligation are paying into the state fund, as a for-profit business would, or electing to become a reimbursing employer and paying out unemployment claims directly, dollar for dollar. Paying the tax into the state fund often means overspending on unemployment taxes and losing money even if your organization has low or no unemployment claims in a given year. The reimbursing employer strategy provides more financial control, but can be extremely risky if an organization experiences a rise in unemployment.

First Nonprofit Group (FNG) offers the safest available programs that mix the best aspects of these two approaches into a risk-averse, cost-effective solution. By providing far more control over unemployment costs, FNG alternatives help nonprofits save money while also protecting them from pooled risk. By employing the use of surety and insurance coverage products and avoiding the cost-pooling elements of contributing to a SUTA fund, nonprofits don’t waste money that could otherwise be spent on operational and project budgets, as well as future claims. With a managed savings or insurance plan, nonprofits can carry such funds as an asset in their books and can even borrow against it when needed. The combination of predictable fees and equal quarterly payments – instead of the heavy first- and second-quarter contributions common with SUTA funds – helps normalize contributions and lessen the financial burden on nonprofits.

First Nonprofit Group also offers the customer support that is lacking from the other options available to charitable groups. Instead of dealing with state 1-800 numbers and dedicating staff members’ valuable time to dealing with these issues, First Nonprofit Group’s customers can use the services of friendly, dedicated and experienced representatives to handle their unemployment needs.

For information on how your organization can cost-effectively meet its unemployment insurance needs, contact First Nonprofit Group at or visit

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Working with Marshal Whittey at First Nonprofit has been a great experience. He handles our request as a priority and goes above and beyond to resolve any issues we have in a timely manner. Marshall follows through to the end and ensures our needs are met. He has been a great resource for LSC and our “go to” for any tax questions we may have. With LSC transitioning several facilities into one federal tax identification number, First Nonprofit was able to assist and provide guidance with best practices resolving claims to each entity. Additionally First Nonprofit provided knowledge (information materials) and one on one training to HRS group with best practices to handle claims state adjudicated, fraudulent claims, and appeals. And processing information in the First Nonprofit [unemployment claims] system allows for timely information can be collected.

Lutheran Services Carolinas, Salisbury, NC

My experience with FNP has been wonderful. Unemployment in general is quite confusing and FNP has simplified the process for us. Everyone we have reached out to or worked with has been very helpful and follows up to be sure we understand the information. I am so happy we made the switch to FNP!

Stone Valley Community Charter School, Huntingdon, PA

First Nonprofit smoothed the unemployment perils for our organization during Covid. Without the ability to cap our UI exposure, we would not have been able to weather the storm. The program worked perfectly and we have come out of the pandemic ready to forge on. Thanks FNP!

Jewish Silicon Valley, Los Gatos, CA

My experience with the FNP has been fantastic. The idea of setting funds aside for the unemployment tax liability is a bedrock for nonprofit organizations like mine, namely ASHBA; what is even more advantageous is having the FNP as a custodian of those funds. 100% recommended!

American Saddlebred Horse & Breeders Association, Inc., Lexington, KY

I would like to comment on my experience with FNP….to date our District has saved $1,000’s of dollars by being enrolled in the First Nonprofit program. My only regret is that we did not know about this method of paying unemployment tax years ago….as I had figured about five years

ago, had we enrolled 15-20 years ago, we could have saved our small school district upwards of $500,000 in payments to IDES. Also we would have had a pretty hefty sum of money in our Reserve Account. Thankfully I attended a workshop hosted by First Nonprofit back in 2015 which got the ball rolling!

Beardstown Community Unit School District 15, Beardstown, IL

I have worked with the First Non-Profit Team for many years, and I appreciate the quick response and care that Cecilia and the team provides anytime I have questions. While there are other providers that may provide like services, First Nonprofit will always be my first choice! I appreciate you!

Innovative Services, Inc., Green Bay, WI

First Nonprofit has been easy to work with and makes the administrative process easier and smoother. We enjoy working with you.

Visually Impaired Preschool Services, Louisville, KY

Luckily for us, our interactions regarding any issues with staffing has been very minimal! I can say that all other interactions with regards to billing, 941 reporting, etc. have been extremely pleasant, accommodating and easy to work with. Kim Ghanayem is always prompt, professional and friendly. Thank you so much!

Neurologic Music Therapy Services of Arizona, Phoenix, AZ